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Writing in the Guardian, Roy Hattersley responds to David Miliband’s criticisms of those wishing to see a more genuinely social democratic Labour Party:

Rejoice. It is just possible that two not very original articles, which recently appeared in small circulation magazines, will stimulate the debate about Labour’s principles and purpose that the party has needed, but lacked, for so long.

In the first article – published in the Political Quarterly – Kevin Hickson and I argued that Labour would only succeed if it based its programme on a coherent and consistent philosophy, that its ideological objective should be a more equal society, and that the Blair and Brown governments had made too little progress in that direction because of two crucial errors: they placed too much faith in the power of markets and they accepted the fashionable view that the role of the state should be drastically reduced. To us it seemed so blindingly obvious that we were not at all surprised when, for months after its first publication, the article was completely ignored.

Then along came David Miliband. His response, in the New Statesman, amounted to the rejection of what he called “Reassurance Labour” – his description of our strongly held belief that, far from being an electoral liability, genuine social democracy is what millions of disillusioned voters are waiting for.

Events conspire to prove our point. Who now believes that “light regulation” will encourage banks to contribute to the general good, or that the profit motive – as illustrated by the collapse of Southern Cross – is the best stimulus to high-quality domiciliary care? If “modernisation” – more often demanded than defined – means accepting that the world is constantly changing, it is a requirement of policy making. If it means that it is now impossible to mobilise a majority for the redistribution of power and wealth, the inherent pessimism is contradicted by the evidence.

There are points at which the two diagnoses coincide. David agrees that, when properly defined, liberty and equality are essentially related, rather than mutually exclusive, conditions. But if he does want a more equal society he has do more than extol its virtues. He has to support the means of bringing it about. And state power is essential to its achievement. We no more believe that the state is always benign than we believe in the extinction, or even the regulation, of a majority of markets. Our complaint against the Blair and Brown governments is that in both areas they lacked discrimination. Markets are often necessary to preserve liberty as well as to promote efficiency – but they are not the best method of distributing welfare, medical care and education. The state sometimes intrudes unacceptably into the lives of its citizens – but more often it is the best way of providing essential social services.

State action is vital to the achievement of a more equal society. It is the most efficient mechanism for the redistribution of power and wealth, and it enables a genuinely egalitarian government to destroy the institutions of inequality and replace them with systems which unite rather than divide the nation.

For some reason, which I cannot explain, David accuses us of wanting to diminish the role of local government. Perhaps he has a guilty conscience. The government in which he served invented “city academies: they are a perfect example of how – by replacing public provision with the individualism of the “choice agenda” – the interests of the articulate, self-confident and determined minority are promoted at the expense of the community as a whole. David ignores the state’s basic duty to protect the vulnerable against private tyranny. So did the Blair-Brown governments. As a result, the bankers’ greed and incompetence created a “lost generation” of the young unemployed.

Understandably, David bridles at criticism of the governments in which he served. We have no doubt that they did much of which the Labour party can be proud. We said so when we campaigned for its re-election. David makes the tired old jibe about the luxury of “principle without power”. But we believe that future office will elude us until we establish a distinctive radical reputation. That requires a leader who has the courage and character to acknowledge the fundamental flaws in New Labour thinking. It is one of the reasons why we voted for Ed Miliband 18 months ago.

Those of us who have suggested David Miliband’s latest political intervention may have – let’s say – ulterior motives have received a bit of flak. Must he stay silent just because any public pronouncement may be misconstrued by the media? Why can’t he contribute to the debate about the party’s future like anyone else?

The problem with this position is that there is the tricky issue of precedent. Back in 2008, David Miliband wrote a similarly ambiguous, cryptic article that was widely interpreted as making a pitch for Gordon Brown’s job. Oh no, it was claimed, he was just adding to the debate about the party’s future. We now know that wasn’t true; from Alistair Darling’s memoirs and other sources we know he was on manoeuvres, but never quite had the bottle to take the final step.

I struggle to see why, therefore, it is so extraordinary to imagine his latest piece should not be seen in a similar light. David Miliband is an exceptionally bright and capable politician with years of front-line experience: he is certainly aware of how this piece would have been received in what was otherwise his brother’s most successful week as Labour leader.

Superficially, the piece is a polemical response to Roy Hattersley. Is David Miliband really re-emerging from the shadows with his biggest political statement since the leadership contest – to take on someone who stepped down as deputy leader of the Labour party two decades ago? Does anyone seriously believe this?

The piece is written in David Miliband’s trademark wonkish style which should give pause to those who believe he would have made a more effective communicator. But in it, he makes a factionalist attack on a constructed grouping he calls ‘Reassurance Labour’. Again, would he really bother aiming fire at this alleged tendency if he didn’t believe it was exerting a powerful influence over the party’s direction?

Essentially, it is a catch-all term embracing those believed to be committed to old-style statist social democracy, or what he calls the “political dead-end of the ‘Big State’”.

Given he’s brought it up again, it’s interesting to note how criticism of supposed statism emerged in Britain. It was barely heard of before the financial crisis, when unions and activists were angrily attacking the creeping privatisation and marketisation of public services under New Labour.

What happened was after Lehman Brothers went under is that the Tories turned a crisis of the market into a crisis of public services. The deficit soared here – as elsewhere – above all because of bank bailouts, tax revenues collapsing in the aftermath of financial meltdown, and soaring spending on welfare because of rising unemployment. The Tories – who had backed Labour’s spending plans pound for pound until the end of 2008 – cynically spun the deficit as the consequence of Labour “overspending”, or big government if you will. Labour failed to effectively challenged this myth and, with the help of allies in the media, the Tories constructed a consensus.

Debates have since raged about how to effectively reduce the state, to move on from a fictional New Labour “statist” approach, and to focus on concepts of community instead; Blue Labour is one prominent example. Would David Miliband and others be making these points about the dangers of statism if it wasn’t for how the Tories had framed the terms of debate? I doubt it.

He argues that, with social democracy, “Growing the pie and distributing it more fairly should be mutually reinforcing.” Agreed – which is why Labour needs a coherent alternative to Tory cuts which, after all, has sucked growth out of the economy. That’s why a strategy for growth – not cuts – should be our priority. Miliband argues the party has been united over “arguing that the Tories’ austerity plan is economically dangerous”, so it would be interesting to know how far he feels a softer austerity should go under Labour.

He argues “we need to continue to modernise the party itself”. He doesn’t mention the unions here (or anywhere in the article – which itself speaks volumes), but this is often New Labour code for breaking the union link. He certainly wants to bring in primaries, opening the door to a US system with expensive contests manipulated by wealthy donors; and undermining a democratic membership party in favour of an amorphous mass of largely passive supporters. In the US, voters in primaries are even more socially unrepresentative than those in normal election contests.

He talks of needing to “establish far more clearly what needs to be defended about Labour’s record in government, not just join the blanket Tory denigration”. Perhaps he shares the bemusement of those who – like myself – were staunch critics of New Labour, and now find ourselves fighting a lonely battle about the myth of Labour’s “overspending” causing the deficit. It is a battle that all too many senior Labour figures are unwilling to fight. But he really appears to be echoing the Blairite mantra that Ed Miliband has rubbished too much of New Labour’s record – “we should also insist that the list of gains far outstripped the mistakes”.

He quite rightly refers to the 2010 defeat as “disastrous, Labour’s second-worst in 70 years”. And it is – I’m sure we all agree – important to properly understand why Labour lost, and which supporters abandoned it. Labour lost 5 million votes between 1997 and 2010, but the Tories only gained a million in the same time. Over 80% of those voters disappeared under Tony Blair’s leadership – that is, by 2005, when Labour formed a government with just 35% of the vote, the lowest share of any successful party in the history of British democracy. The old New Labour triangulation strategy was that the so-called “core vote” had nowhere else to go, but relatively affluent swing voters were key to electoral success. But while Labour lost just 5 points of support from the ABs – the professional middle-classes – between 1997 and 2010, it haemorrhaged 21 points from its C2s (skilled and semi-skilled workers), and 19 points from the DEs at the bottom.

In other words, the old New Labour formula lost the party millions of working-class votes. “The core vote became the swing vote”, as Ed Miliband put it during the Labour leadership contest. It is not a point that David Miliband addresses.

He ends the article by attacking what he calls the “Reassurance Labour tendency”, not just for minimising the chances of electoral success, but because “its vision is too narrow, its mechanisms too one-dimensional, and its effectiveness too limited.”

But who – other than some bloke sitting in the House of Lords who left front-line Labour politics two decades ago – does he mean by this “Reassurance Labour tendency”? Who are its leading figures? Because – again – why would David Miliband break his silence with his most high-profile political intervention yet to aim fire at it if it was not a pretty powerful bunch?

This is – in reality – a proxy attack, not a serious polemical response to Roy Hattersley. It would take impressive powers of self-delusion or naivety to believe otherwise.

David Miliband identifies the division in the party as between modernisers like himself, and the ‘Reassurance Tendency’. But I see the division as a bit different: between those who want a coherent alternative to the Tory cuts agenda, and those who accept the essentials of what the Tories are doing and only quibble with the details. I call the latter the “Surrender Tendency”.

And before I’m accused of factionalism, I’m only talking in the same terms as David Miliband.

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